Textbooks are too Expensive

The business of post secondary education, and training programs has taken off in terms of profit margins in specific areas.

When I was a student (many years ago), the profit centers for Universities were:

  • Tuition Fees
  • Government Funding
  • Private Funding
  • Gifts from alumni
  • Services on campus
University Costs for RESP

Those Two Books Cost Almost as Much as 1 Term Tuition when I was at School.

There was also another income center which was shared between the professors and the school and that was the sale of Text Books. When I started at U of Waterloo there were not that many texts on computers, and the ones we used were quite expensive, but now the entire text book market has exploded, and the prices have increased a great deal.

Why, is my question, are text books still so darn expensive? The simple answer is, profits, and a captive audience. If a professor makes the textbook compulsory for a course, he is forcing students to either:

  • Buy the textbook new
  • Buy it from a Used Book Store (which many times, is a previous version and may not be up to date, or worse a different text is to be used (which happens a lot in technology courses)).
  • Rent the book ? Yes there are such services out there as well.
  • Find a “boot leg” PDF, or similar “unofficial” version

These textbook costs are on top of the new Large Service fees from Universities, and also the costs of living away from home (if that is the case). Hope you folks are saving, if you plan on helping your kids out with post-secondary education costs.

How expensive can these books be? In the photo in this post, those two books added up to $350.00.

 

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My Four Best Investments

Over my financial career I have made many mistakes investing, however there are a few very good investments that I can point to as successes.

My first investment (but not my best) is buying into the Federal Public Service Pension Plan. Thanks to blind luck, I was able to do this, and while it is my biggest investment (yes, even more than my house), it is not the investment that I am most proud. As I outlined in a previous post, thanks to some excellent timing (read luck) on my part I was able to transfer my Nortel Pension into the Federal Public Service Pension plan, and that will (hopefully) allow me to actually retire.

Trent University

Trent University

My 3 other investments (of which I am equally proud) are:

  • A Bachelor of Arts Degree from Wilfrid Laurier University
  • A Bachelor of Kinesiology Degree from Acadia University
  • An Honours Bachelor of Science Degree from Trent University (and hopefully a teaching diploma from Queens University)

As you can tell from the list these are the three degrees that, thanks to some help from my RESPs ,that I helped my daughters’ receive. My youngest daughter has just graduated from Trent University, and as I mentioned in the post I did for me eldest daughter’s degree So That is What $50,000 looks like, it was another excellent investment. Whether my son goes to post-secondary education, we shall see (we are hopeful), but so far aside from being able to retire, I feel I have gone 3 for 3 on these investments.

This is not to say, that if you have decided not to help your children with their post-secondary education you are a bad parent (far from it, many folks just cannot afford to help their kids), just that I have made some awful investments in my time, luckily I have made a few good ones as well.

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Proliteracy.ca – Like Cheese on Vegetables

Let me preface this, that this is a Guest Post from a group of chaps I tripped over a while ago. Sounds like an interesting idea to me teaching folks about the costs of University, they are looking for feedback, have a read and see what you think.

Feels like cheese

by Alfred Yang

For those of you who lived through the 90’s, remember that old Cheese Whiz commercial where kids are reluctant to eat their vegetables until they’re garnished the amazing product? Well, that commercial kept replaying in my head as I worked on Proliteracy.ca, a free tool that helps Canadians plan finances for post-secondary education.

I can’t help but get the feeling that personal finance education is a lot like vegetables.  We all know it’s good for you, but it isn’t that appealing, especially to young people.  I feel like our team at Proliteracy.ca is trying to create the secret sauce that makes something dry and boring more consumable.

Fortunately, from the start of our journey we’ve met many organizations and individuals who share the same passion for promoting financial literacy.  Subject matter experts in the field of personal finance, like Big Cajun Man, gave us the motivation to continue our work.   Today, Proliteracy.ca is available to all Canadians looking to understand post-secondary financing.

The secret sauce?

Despite the rapid evolution of financial technology, it has yet to change the way most consumers educate themselves about personal finance.  The internet gives us incredible access to information, but it can be overwhelming.  The Proliteracy.ca team wanted to find a way to help people filter through the noise to focus on what’s really important to their own situations.

Our team wanted to start by helping students and young parents, a demographic that is arguably the least motivated to learn about personal finance.  Ironically, most members in this very same demographic have a major financial hurdle to overcome – financing post-secondary education.  Tuition has been increasing steadily in the past two decades and according to the Canadian Federation of Students the average new grad from university owes over $28,000 in student debt.

Through extensive research, we found plenty of information on financing post-secondary education, but when considering our own personal situations, a number of questions still remain unanswered:

  • If I have a young child today, how much should I be saving towards?
  • How does studying in a different school or different city impact my cost?
  • How much money should I set aside each month so that I am not too late by the time my child is ready for college?
  • Beside savings, what other financing options are available?
  • How does borrowing impact my child’s financial future?

Proliteracy.ca aims to help forecast the cost of education based on each student’s personal situation. We do the heavy lifting to organize data that’s freely available so that it’s more accessible and easier to understand.

First, we prompt you to answer a few questions, including programs and schools of interest, and the year of enrollment. Then we forecast the cost of tuition, books, and other expenses based on historical data. The end result is a good estimate of the financial target you or your family should be aiming for when planning for post-secondary education.

With an understanding of cost, we’re able to suggest a variety funding options starting with the least expensive options: savings, grants and scholarships.  We build awareness to great federal programs like the Canadian Learning Bond (CLB) and Canadian Education Savings Grants (CESG) and highlight the impact they have on RESP savings.  We also perform grants and scholarships matching, allowing families to take advantage of resources that are otherwise unknown to them before taking on debt.

Eat your vegetables, they’re good for you

In October, we ran a pilot program at three different high schools in the Greater Toronto Area.   We found that students and many young parents are generally not motivated to learn about personal finance and most are not prepared for the high cost of post-secondary education.  Tuition is increasing well beyond the rate of inflation, and a child’s college or university education a decade from now could easily set a family back by over six figures.  Most individuals we spoke to admit that they are planning finances for post-secondary education too late.

Like eating vegetables, financial planning needs to start early in life.  When confronted with a significant financial hurdle like cost of post-secondary education, families need to get into the rhythm of saving, learning about funding options and understanding the implications of debt.

We need your help

Since our pilot launch, we’ve received a lot of encouragement and feedback on how we can improve. While our team is making great strides towards creating an amazing planning tool, we can get there a lot faster by working with individuals and organizations who share the same passion for financial literacy.

So, if you have any feedback at all, we’d love to hear from you.

www.proliteracy.ca

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Private School Fallacy

On the weekend Garth Turner railed about a parent he met who was sending his child to a private school, even though he could not afford it. I couldn’t really tell whether this child was smart or learning disabled, but Garth went on about how Public Schools are perfectly good, and you are a fool if you send your child to a private school, given you are paying taxes for the Public school system.

Let me state my opinions on this (leaving Garth’s odd commentary aside for now). The public school system is set up for the middle 80% of

This is not very cheap

This is not very cheap

children, in terms of “intelligence” and such, that is a fiscal truth (unfortunately). Depending on the school and teachers, most folks kids will do just fine in the public school system (most of the time), however, if your child is in the upper 10% (i.e. gifted) or the bottom 10% (learning disabled, or other issues) there are few programs in the public school system in Ontario. Yes there are “gifted” programs and there are programs for kids who need more help, but they are woefully underfunded and very hard to find (and to be included in).

For those about to leap into the “you are generalizing, I know of a kid…”, I am not. I have been blessed with 4 wonderful kids, two which went through the “gifted” program in the public system, and 1 that is on the Autism spectrum who is in a private school. The “gifted” programs are being cut, due to budget issues, and the “rules”  for placement in a gifted program are getting tighter and tighter (so they really only serve the top 3% ).

As for the Public Board’s Autism program, it is set up for the kids much more disabled than my son, so he ends up “between” the two programs, and hence why he is in a Private School program (maybe this will change, we shall see how he develops over the next few years).

Different people have different reasons for putting their kids into Private Schools, but if you cannot afford to put your kid into a Private School, and you are only doing it for “prestige” and not a specific educational reason, maybe you should review that. If your child does need a special program at a Private School, investigate if there is help you can get for in the public system.

What is your opinion, Private or Public school systems?

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I Don’t Have Time To Learn All This!


Many folks complain that they just do not have time to learn more about their finances and investing and to that I say, Hog Wash (apologies for the salty words).

If you want to learn about investing, frugality or personal finance in general there are so many ways to get good information you are kidding yourself if you say you don’t have time to learn (and you are doing yourself damage financially as well).


The good news is you already have started, because you are reading this blog (and hopefully many other Financial Blogs (look in the right column on this page if you are reading it in a browser). Good for you, you get a gold star for this, but there is so much more you can be doing to get your financial IQ up.

There are financial podcasts all over the place, our friend Preet has a great one, which you should listen to and there are countless other ones. There are financial E-Books everywhere so you can read or listen to so much information, that will enrich your understanding of the world of finances.

You don’t have time, you say? Mule Muffins! If you commute to work, there is your time right there.

  • If you drive, can you connect your listening device to your car’s radio system? If so, you are in, simply put all the audio financial info you can find on that device and listen away. That is where I listen to podcasts, and interesting financial books.
  • If you take the bus, you have many options: You can either read using an e-reader, or your tablet (or even a printed book (how old school is that)); or listen with your favorite audio device. When I was taking the bus downtown I listened to countless books during the commute. Reading the paper is fine for the commute, but you can do more

This all sounds expensive does it? Horse Fritters! Remember your library is your friend and in Ottawa we have a wonderful collection of all kinds of e-books, audio books and written books to fill your educational gap. If you are in Ottawa and you don’t use the library (and maybe donate some money if you are), you are not taking advantage of this valuable resource. You can download audio books and listen to them straight from there.

In the New Year, your resolutions about losing weight, working harder and not kicking the dog so much, while important, pale in comparison to learning more about your finances, go do that now (don’t wait for the new year).

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